The Future of Entrepreneurship in Canada 2021 - Taking the pulse of Canada's current and aspiring small business owners - QuickBooks
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
The Future of
Entrepreneurship
in Canada 2021
Taking the pulse of Canada’s current
and aspiring small business owners
1
What’s inside About the survey
• What the state of entrepreneurship The study, conducted leveraging the Angus
looks like in Canada Reid panel on behalf of Intuit QuickBooks
Canada, was completed by 2,006 Canadians,
• The impact of COVID-19 on small nationally representative of the Canadian
business owners population. Among the total sample, 589
Canadians identified as entrepreneurs,
• Motivations and barriers to defined as having undertaken one or more
entrepreneurship entrepreneurship initiatives (i.e., starting a
business, whether formally incorporated
• How entrepreneurs are embracing or not, as a primary means of income or
e-commerce and digital tools supplementary means of income, and as
started alone or with others), and 247 identified
• What opportunities entrepreneurs see as aspiring entrepreneurs, defined as not
to better support their success yet having undertaken an entrepreneurship
initiative, but considering it in the next 2 years.
The estimated margin of error for the total
sample is +/- 3% at a 95% confidence level. The
study took place online from April 14 -19, 2021.
2
The future of entrepreneurship in Canada is bright
Small businesses are the backbone of the Canadian economy, which Of course, we can’t ignore the challenges that remain. While money is
means entrepreneurship is an important factor that shapes the a major motivator for entrepreneurs, it’s also a point of concern,
economic growth of the country. Powering prosperity for Canadian especially among Gen Zs and Millennials. Beyond financial
small businesses is at the heart of what we do at Intuit QuickBooks, challenges, being an entrepreneur is stressful. It can de-prioritize
and although COVID-19 has undoubtedly disrupted the lives of work-life balance and be mentally and emotionally draining.
Canadians, with disruption often comes opportunity. From funding and financial management resources to better support
for mental health, entrepreneurs need our support. There’s a clear
To better understand how Canadians are adapting to this new world, opportunity for the private sector, government and even non-profits
we wanted to get a sense of the state of entrepreneurship in Canada to partner with Canada’s entrepreneurs and drive our economic
as we look towards economic recovery. recovery forward, together.
It’s exciting to see that the entrepreneurial spirit in Canada is alive
and well. As our survey reveals, entrepreneurship has continued to David Marquis
grow since the beginning of COVID-19, both because of and in spite VP & Country Manager of Intuit Canada
of the challenges it presented. Among Canadian entrepreneurs, one
in five (21%) started their business within the past year. To put that in
perspective, that represents close to two million Canadians – more
than the population of Calgary.
Many of these entrepreneurs are embracing digital, from selling
online to using digital marketing tools to take their businesses to the
next level. You have probably witnessed firsthand as neighbourhood
businesses have pivoted to survive, from restaurants pivoting to meal
kit delivery to small brick-and-mortar retailers diving into
e-commerce.
As you’ll see in this report, Canadian entrepreneurs are optimistic
about the future and at QuickBooks, we are too. Not only is running
one’s own business personally rewarding, but a culture of growing
entrepreneurship has a positive impact on our economy and society.
3
The state of entrepreneurship
in Canada
Canada has an entrepreneurial spirit. In fact, 98% of businesses in Canada are
small businesses. Our survey reveals that a third of Canadians are currently
entrepreneurs or have undertaken an entrepreneurial endeavor in their
lifetime. COVID-19 sparked even more entrepreneurship in Canada, with new
businesses emerging in the wake of an extraordinary disruption.
1 in 5
Canadian entrepreneurs started
their business within the past year.
That’s close to with
9 million 2 million
entrepreneurs in Canada, starting their business during COVID-19.
COVID-19 created both challenges and opportunities for entrepreneurship
in Canada. Stay-at-home orders and rolling closures affected many small
businesses and created financial pressures. At the same time, a boost in
spare time and the need to find new sources of income also prompted some
Canadians to start their own businesses on the side or full time.
4
Why businesses started up Gender, generation, and geography all play a role in Canada’s
entrepreneurial makeup. Men have been more likely than women
in the last year to have taken on starting a new business in their lifetime.
39% had more spare time
due to COVID-19.
34% 25%
VS
23%
of Canadian men have of Canadian
faced financial pressures
taken on an entrepreneurial women have taken on an
from COVID-19 (19% from
endeavor entrepreneurial endeavor
being laid off).
Who started up?
15% saw an unmet need
in the market.
It’s not a surprise that older Canadians – Gen Xers and Baby
Boomers – are more likely to have been entrepreneurs in their
lifetime. However, Gen Zs and Millennials are more likely to
have started their business within the past year.
Many of Canada’s entrepreneurs, especially those who started up
in the past year, consider their endeavors to be side businesses.
72% 44% Gen Z
and Millennials
25%
Gen X
7% Baby
Boomers
Canadian entrepreneurs consider who started in the last
their entrepreneurship initiative to year say theirs is a side
be a side business. business. 5
“Before COVID-19 hit, our game store
operated as brick and mortar only.
Flash forward to today, we’ve jumped
feet first into digital and our online
store has redefined our business
model and how we approach selling.“
– ANDREA ROBERTSON, Rain City Games
6
The future of Helping businesses
entrepreneurship get online
is digital
Current and aspiring entrepreneurs are putting more effort into e-commerce. The shift to selling online is more
Along with brick-and-mortar businesses pivoting to selling their products important than ever before. We joined
online, we’re also seeing more entrepreneurs emerge as online sellers.
forces with Digital Main Street to help
Overall, Canadian entrepreneurs are more oriented towards selling services get small businesses online through
over products, and lean towards consumers as their customers, rather than
the development of e-commerce
other businesses, though some do sell to both.
storefronts and we are committed to
finding new and innovative ways to
72% 79% support the growth and prosperity of
small businesses.
of entrepreneurs sell to consumers,
sell services and while 44% sell to
43% sell products. other businesses.
Learn more
While 41% of Canadian entrepreneurs sell exclusively offline, more sell
online, and 22% sell through both channels. Among the businesses started
up over the past year, 3 in 4 sell online, and over half sell exclusively online.
59% 37%
of entrepreneurs sell online only.
sell online.
7
Aspiring entrepreneurs are also more likely to focus their attention online.
4 in 5 aspiring entrepreneurs plan to sell
their products or services online.
Female entrepreneurs are the most likely to sell exclusively online, while
younger generations are also most likely to sell online.
Who’s selling online only?
Female Gen. Z/Millenial
Male Generation X
Baby Boomers
42% female entrepreneurs 49% of Gen Z and Millennial
online vs. 34% of males. entrepreneurs vs. 38% of Gen X
and 31% of Baby Boomers.
Along with selling online, entrepreneurs are also generally comfortable
using digital tools to manage and build their businesses.
What digital tools are entrepreneurs
comfortable using?
67% 64% 62%
say digital say digital say digital commu-
marketing banking tools nication solutions
8
An opportunity
However, entrepreneurs are generally less comfortable when it comes
to financial management software.
for easier financial
management
41%
feel comfortable using
financial management
software. While Canadian entrepreneurs are proving
to be savvy with digital marketing and
communications, they have an opportunity
to modernize how they use digital tools for
financial management. Many entrepreneurs
31%
are leaning on desktop tools and offline
of aspiring entrepreneurs are
comfortable using financial processes, instead of cloud-based services,
management software.
which are often more streamlined, saving
time and money.
At QuickBooks, we use our AI-powered
Only a third report using an accounting service or professional. With the
desire to handle finances independently, but a gap in comfort, there’s platform and deep customer insight to build
an opportunity for entrepreneurs to build their knowledge of digital product innovations that empower our small
financial management tools.
business owners. Ultimately, our vision is for
QuickBooks to be the source of truth for your
1/3
of entrepreneurs report
business. A single integrated platform to
address your needs.
using an accounting
service or a professional.
Learn more
9
“Being a restaurant owner has been an
uphill battle over the past year. Because
of COVID-19, we’ve had to find new ways
to pivot and get in front of our customers
– through food delivery and social media
marketing. Now, the community I’ve
created through channels like Instagram
are my support system.”
– JENNIFER FOSTER,CW Coops Angus
10COVID-19’s impact
on entrepreneurs
While COVID-19 has prompted new businesses to emerge, it undoubtedly
had an impact on existing business owners – although in some cases, it led
to positive growth. Half of entrepreneurs over 55 reported that COVID-19
did not affect their business, compared to just a third of Gen Z and
Millennials and 36% of Gen X entrepreneurs.
50% 1/3 36%
of entrepreneurs of Gen Z and Gen X entrepreneurs
over 55 reported that Millenials reported reported that
COVID-19 did not that COVID-19 did not COVID-19 did not
affect their business. affect their business. affect their business.
3 in 5
entrepreneurs say that COVID-19 has
affected their business in some way.
11How COVID-19 affected businesses How all entrepreneurs* are making sacrifices
25% 16%
1 in 4 1 in 5 1 in 5
paused or closed grew their
their business. business.
have been working have taken on have foregone a
longer hours. more debt. personal salary.
18% 13% Despite the challenges,
COVID-19 has also influenced 55% of entrepreneurs
scaled back pivoted their have begun rethinking
their business. business. how entrepreneurs are
their careers.
thinking about work.
As a result of COVID-19, business owners have had to adjust How entrepreneurs are rethinking work
financially and in their personal lives.
61%
of entrepreneurs 64% have a greater 59% want more 56% want more
say they have had desire for multiple work-life balance. job security.
to make sacrifices. income streams.
Among entrepreneurs over 55, 16% have even delayed
55% want to 53% are motivated 53% have a greater
retirement. However, younger entrepreneurs are more likely
positively contribute to find new ways to desire to work for
generally to have made sacrifices like working longer hours, grow their business.
to society. themselves.
spending less time with family and taking on debt.
12
*These stats include entrepreneurs overall, not Gen Z or Millenials specifically.“This past year has been a challenge.
Running a company, being a mom and
being a teacher to my two girls leaves no
room for work-life balance. But, everything
I do is for them – they are my motivation.”
– KIM WEST, Kids Swag Co
13What’s driving
entrepreneurs now?
While money is the number one driving force for entrepreneurship,
freedom and flexibility also push entrepreneurs.
What’s motivating entrepreneurs?
68% 56%
say earning say setting their
money own hours
58% 50%
say being their say doing some-
own boss thing meaningful
Money is also the top motivator across generations, but younger
entrepreneurs are more likely to seek out creative freedom and the
chance to have a positive impact on the world around them.
14What different Female entrepreneurs seek
generations want different benefits
Setting their own hours
Money
62% 50%
Creative freedom
Making a difference
Female Male
Gen Z and Millennial
75% Doing something meaningful
61%
58% 43%
52%
Generation X Female Male
74%
49%
Creative freedom
36%
Baby Boomers
60%
54%
Female
40%
Male
39%
34%
Taking a vacation whenever they want
Female entrepreneurs are also more likely than their male
32% 23%
counterparts to crave freedom, meaning and flexibility. Some of
that sentiment may be driven by women often being the primary
caregivers in their households and as a result, wanting greater Female Male
flexibility in how they use their time.
15“My employees are my biggest asset.
Being deemed essential, we need to be
in the workplace, so my ultimate goal
is keeping us all safe and sane, and our
mental health is a top priority.”
- KAREN LAI, KPM Power
16The role of money COVID-19
& mental health support
While definitely a motivator behind entrepreneurship across generations,
money is also a key area of concern among small business owners.
At QuickBooks, we’re always supporting
the entrepreneurs that keep our
economy running — and when COVID-19
hit, QuickBooks put all hands on deck to
46% of entrepreneurs report
worrying about finances.
help harness millions of dollars through
GoFundMe to support small businesses
all around the world.
Financial issues worrying
Read more
entrepreneurs
37%
say cash flow
22%
say access
16%
say managing
to capital business finances
Beyond financial challenges alone, 1 in 2 entrepreneurs are also worried
about failing and are concerned with both wider business challenges
beyond finances and their work-life balance.
17What’s keeping Canadian
entrepreneurs up at night?
entrepreneurs need
support to succeed
QuickBooks’ Ask the Expert segments
share tangible advice from experts and
thought leaders on topics important to
39% 35% 28% small business owners and entrepreneurs.
From navigating mental burnout to
say COVID-19’s im- say growing their say succeeding in a building a social media strategy, this series
pact on the economy customer base competitive market
aims to arm small businesses with the
knowledge they need to thrive. Segments
Close to are hosted monthly on our social channels
1 in 4
also say time manage-
on Facebook and Instagram.
ment and working long
hours are a concern.
Learn more
Uncertainty around finances and failure are also having an impact on
an entrepreneur's mental health. Overall, the majority of entrepreneurs
(76%) say running their own business is stressful and 1 in 2 also say there
are not enough mental health resources for entrepreneurs.
18What’s affecting mental health? Financial uncertainty
Financial uncertainty may also have implications for future
3 in 5
entrepreneurship in Canada. Among aspiring entrepreneurs,
are worried even more are concerned about their finances.
about money.
1 in 2 1 in 2 1 in 2
3 in 4
don’t have the financial are worried are worried
resources to compete about failure. about burnout.
with other businesses.
aspiring entrepreneurs
are worried about money.
Compared to older entrepreneurs, Gen X entrepreneurs are also
most likely to report feeling stress, worry – including about finances –
and burnout.
Gen X is stressed
81% 68% 2 in 3
of Gen Xers find are worried
worry they won’t have
entrepreneurship about money.
the financial resources
stressful.
to compete.
63% 63%
are worried are worried
about failure. about burnout.
19“With growing recognition of physical
and mental health issues in our society,
and the implications COVID-19 has had
on entrepreneurs and their employees,
government policies aimed at helping
small business should prioritize physical
and mental wellness for business owners
and their teams.”
– KRISTI HEROLD, CEO, JAM - powered by Sport & Social Group
20What entrepreneurs Entrepreneurs
need for the future helping
entrepreneurs
Despite the challenges arising out of COVID-19, established and aspiring
Canadian entrepreneurs alike are optimistic about the future.
Through the Intuit Prosperity Accelerator,
73% 76%
we worked with tech startups to solve
challenges consumers and small
businesses are facing as a result of
of entrepreneurs of aspiring entrepre-
are optimistic for neurs are optimistic COVID-19.
the future. for the future.
Learn more
At the same time, they need support to succeed in a post-COVID world.
2 in 5 2 in 5 1 in 2
entrepreneurs feel more say the same about aspiring entrepreneurs
government funding easier access to also think more government
would be helpful funding funding would help.
21Along with financial support, entrepreneurs also think access to free
informational training would help them succeed post COVID-19. Younger
generations – Gen Z and Millennial entrepreneurs – and women are most
likely to see value in these kinds of resources.
Resources or courses entrepreneurs want
34% 33% 31% 26% 25%
marketing taxes accounting mental health building
management capital
Soon-to-be business owners want similar educational resources as their more
established counterparts but are also more likely to think other programs
connecting them to experienced business owners would be helpful.
What aspiring entrepreneurs want
44% 35% 28%
say mentorship say networking opportunities say informational webinars
programs with other entrepreneurs with other entrepreneurs
22How Canada can
support the future
of entrepreneurship
Canada’s entrepreneurs and emerging business owners
are optimistic – a good sign for the country’s post-
COVID-19 recovery and the year to follow. While money
is still the primary motivational driver for entrepreneurs,
the potential for creative freedom and flexibility is
inspiring people across the country to be their own boss.
However, these economic engines need support. For
Canada to ensure current business owners are thriving
and we have a healthy pipeline of emerging business
owners, supporting entrepreneurs now is essential.
23What small business
are looking for
Greater financial support More mental health resources Stronger educational
for entrepreneurs and programs to support resources and networking
work-life balance opportunities
Clearly, money is a motivating factor for
entrepreneurs, but it’s also a source of Being an entrepreneur is rewarding but also From tax training to insights on marketing,
concern. Young and aspiring entrepreneurs stressful. Female entrepreneurs and Gen entrepreneurs are after resources to help them not
especially – Canada’s future small business Xers in particular are the most likely to be only manage their business day-to-day but grow.
owners – are concerned about debt levels, feeling the pressure of COVID-19, which has Aspiring entrepreneurs especially are also looking
access to capital and having the resources to affected their work-life balance. However, for more networking and mentorship opportunities,
compete. Governments and the private sector the majority of entrepreneurs surveyed which can potentially play a key role in their future
alike can step up to help these businesses say running their own business is stressful. success – and as a result, the success of Canada’s
secure financing and embrace better financial Programs that support mental health and small business community. The private sector and
management tools to maximize their success. well-being may help more entrepreneurs to non-profits especially can play an important role in
thrive. Embracing digital tools to help save providing these resources and opportunities.
Post-COVID-19 recovery resources time and money when managing the day-
Tools and resources to help support small to-day can also have a positive impact. Resources for running your business
business recovery: QuickBooks is committed to providing resources
Mental health resources for Canada’s growing businesses. Here is some of
• Small Business Help: Find the help Resources offering a range of services and what we offer:
you need to prepare your business,
support on mental health and well-being:
communicate with customers, and support • Free Resources for Running Your Business:
your employees during COVID-19.
• CAMH resources Find free resources and expert opinions on the
financial management topics most relevant to
• Canadian Federation of Independent
• Business Link resources you, as a small business owner.
Business: CFIB offers resources and
support to help small businesses grow and
• Business Development • Video Tutorials on QuickBooks Online:
navigate COVID-19 crisis. Watch step-by-step videos to learn your way
Bank of Canada resources
around QuickBooks.
• Government of Canada: COVID-19
benefits and services to help Canadians • Business Builder Webinars: Learn how
and businesses facing hardship as a result to improve the way you do business from
of the global COVID-19 outbreak. industry experts.
2425
You can also read
